Insiders were the key beneficiaries as The Hongkong and Shanghai Hotels, Limited's (HKG:45) market cap rises to HK$9.4b

Key Insights

• Hongkong and Shanghai Hotels' significant insider ownership suggests inherent interests in company's expansion
• The largest shareholder of the company is Michael David Kadoorie with a 51% stake
• Institutions own 17% of Hongkong and Shanghai Hotels

A look at the shareholders of The Hongkong and Shanghai Hotels, Limited (HKG:45) can tell us which group is most powerful. The group holding the most number of shares in the company, around 57% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit HK$9.4b market cap following a 6.2% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Hongkong and Shanghai Hotels.

See our latest analysis for Hongkong and Shanghai Hotels

What Does The Institutional Ownership Tell Us About Hongkong and Shanghai Hotels?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Hongkong and Shanghai Hotels does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Hongkong and Shanghai Hotels' earnings history below. Of course, the future is what really matters.

Hongkong and Shanghai Hotels is not owned by hedge funds. Our data shows that Michael David Kadoorie is the largest shareholder with 51% of shares outstanding. This implies that they have majority interest control of the future of the company. With 16% and 5.1% of the shares outstanding respectively, Bermuda Trust Company Ltd , Asset Management Arm and Sino Hotels (Holdings) Limited are the second and third largest shareholders.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Hongkong and Shanghai Hotels

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own the majority of The Hongkong and Shanghai Hotels, Limited. This means they can collectively make decisions for the company. Insiders own HK$5.3b worth of shares in the HK$9.4b company. That's extraordinary! Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hongkong and Shanghai Hotels. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 5.1% of Hongkong and Shanghai Hotels. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hongkong and Shanghai Hotels better, we need to consider many other factors. For example, we've discovered 3 warning signs for Hongkong and Shanghai Hotels (2 are a bit unpleasant!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.